1. Cadbury
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University College Dublin
National University of Ireland, Dublin
MSc. in Management Programme
BMGT43320: Global Strategic Management
CADBURY:
An analysis of Cadbury’s global strategy within the chocolate and confectionary
industry
Group Assignment
Semester Two
2013_14
Group D8
Alanna Burke 10330707
Christopher Coyne 09290401
Conor Martin 13203539
Guillermo Martinez 13204799
Jiayi Zhu 13201000

2. Cadbury
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Cadbury is considered a top brand in the global chocolate and confectionary industry as its
global market share accounts for 14.8% of the total market. However, for Cadbury to sustain
a competitive advantage in this industry, it is necessary to develop new strategies that can
consolidate their brand in their core market. Product development will allow Cadbury to
deliver new products to existing markets, as well as in emerging markets, positioning
Cadbury as a strong first mover. Mars, who accounts for 14.6% of the global market share, is
following Cadburys steps and patterns, competing with them in becoming the global leader in
producing chocolate and confectionary. For Cadbury to maintain the top position within the
industry they must derive strategies align with their strengths and opportunities.
A range of internal and external analysis was carried out in order to provide us with an
overview of the resources and capabilities that impact the company’s performance. A SWOT
and VRIO analysis showed us where the company is today, the potential threats the company
may face up and the opportunities available for future investment. The results of these
analyses provided us with information to come up with potential strategies for Cadbury.
A main strategy has been established as a result of the above analyses. The action plan is
aimed to introduce a range of new products into an existent market, where Cadbury does not
operate yet. Cadbury Creations is the name of the proposed range of products, which aims to
break into the baking market.
Executive Summary

3. Cadbury
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Cadbury, owned by Mondelez International, is a British multinational confectionery
company. Cadbury was established in Birmingham in 1824 and is the second largest
confectionery brand in the world. Cadbury has continued to grow over the years and has
introduced a wide range of products suitable for multiple markets. Cadbury owns a large
range of products within the chocolate and confectionary market, including Cadbury Dairy
Milk chocolate bar, which is company’s bestselling product. The company’s main markets
include Ireland/UK, Western European countries and Australia.
Cadbury is both Ireland and the UK’s leading chocolate and confectionary brand and has
strong market share throughout many levels of the market. Emerging markets such as India,
China and Russia are key markets in obtaining successful future growth figures and market
share. However, Cadbury’s core market, which is Ireland/UK, is extremely important for our
company and must be considered as priority when thinking about research, innovation and
new products introduction (brand expansion).
The purpose of this report is threefold. Firstly, an external analysis will be carried out which
will look at Cadbury’s political, economic, social, technological, legal and environmental
factors in which the company operates, as well as an analysis of Porters Five Forces.
Secondly, an internal analysis will be carried out which will provide us with an overview of
the resources and capabilities that impact the company’s performance. A VIRO and SWOT
analysis will be performed. Lastly, strategies will be provided based on the analysis of
Cadbury’s internal and external environment. These will increase its prospect of gaining a
competitive advantage against its competitors in the chocolate and confectionary industry.
The chocolate and confectionary industry has been dominated over time by multinational
firms, such as Nestle and Hershey’s. However, Cadbury emerged in Britain, in the early 19th
century, as a family owned company offering high quality chocolate bars which grew fast in
popularity. Today, Cadbury, owned and managed by Mondelez International, is placed within
the top three-world chocolate producers.
Chocolate consumption has been seen as a privilege to the Western countries with Ireland,
UK and Switzerland being their top consumers. However, global distribution networks and
steady economic growth of emerging markets has created a new niche of sales for chocolate,
which previously before was considered unaffordable and a luxury product.
This report aims to; analyse the internal and external factors that have impacted Cadburys
global production and distribution networks, identify threats and opportunities within the
industry and establish action plans that can that neutralise the threats and exploit the
opportunities in order to gain competitive advantage in the emerging markets.
Introduction
Abstract

4. Cadbury
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Company Overview
Cadbury was established in Birmingham in 1824 and is a British multinational confectionery
company, owned by Mondelez International. It is the second largest confectionery brand in
the world.
Cadbury is best known for a wide range of confectionary products priding itself on its world-
renowned Dairy Milk chocolate bar. The company was known as Cadbury Schweppes Ltd.
from 1969 until its demerger in 2008. This demerge gave Kraft Food Group the chance to
acquire Cadbury providing it with strengths and opportunities within the chocolate and
confectionary industry, as well as being able to gain a sustainable competitive advantage over
their competitors. Cadbury can also offer Kraft greater access to sharp growth in emerging
markets such as India, China and Russia. Cadbury’s market value was £11.9 billion by the
year 2010 (The Telegraph, 2010): however with Cadbury operating in more than fifty
countries worldwide, its brand value has enormous potential and surpasses any figure.
Cadbury Ireland/UK market are the main producers and exporters of the company’s “billion
brands” such as Cadbury Dairy Milk chocolate bar, Cadbury Twirl and Cadbury Wispa.
With more than €250 million worth of Cadbury’s chocolate being produced and exported by
the Ireland/UK division each year (Wikipedia, 2014), it has allowed Cadbury to grow from
being a small scale manufacturer in a protected home market to a substantial producer and
exporter of global brands. Cadburys main reasons for achieving global success lie within its
core competitive advantages in; Research and Development, Experience and Supply Chain
Sustainability. Cadbury’s R&D department gained a competitive advantage in that they were
able to exploit in Kraft’s expertise in their distribution networks. With nearly reaching 200
years in global experience and expertise, Cadbury guarantee a high quality standard product.
A large investment made by Cadbury/Mondelez into their “Cocoa Life" sustainable supply
chain programmes ensures “cocoa sustainability that will create a cycle of growth from bean
to bar," said Tim Cofer, executive vice president and president for Mondelez (Mondelez
International, 2012). This investment is aimed to boost the economy and production of the
cocoa farms that supply the raw materials for chocolate production. Thus providing power
leverage for Cadbury over its suppliers and giving them a competitive advantage.
Issues and Outlook Profile

5. Cadbury
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Mission and Strategy
Cadburys’ mission statement states the following “Cadbury means quality; this is our
promise. Our reputation is built upon quality; our commitment to continuous improvement
will ensure that our promise is delivered”.
Cadbury’s strategy aim is to provide profitability growth, top-tier financial results and a
sustainable competitive advantage. The firm has a number of competitive advantages; a
strong geographic position, an extensive portfolio of iconic products and innovation
platforms. These innovation platforms combined with Mondelez’s capabilities and
distribution networks will drive the firm to operate at maximum profit levels and guarantee
long-term growth opportunities.
Knowing that the R&D department is one of the main reasons for Cadbury’s current success
and assuming that Cadbury’s future strategic decisions, such as introduction of new products
and extension into new suitable markets; will arise from the R&D, large investments in this
department will be considered as priority for the board of directors. A key driver is ensuring
reinvestments from the shareholders and that the earnings per share given to them do not fall
under a ratio of 30%.
Cadbury have a number of goals and objectives, listed below, which are aimed to align the
company’s strategies. To excel in any industry it is extremely important that the companies
set of goals and objectives ensure innovation, customer satisfaction, production efficiency
and a sustained competitive advantage.
Invest, innovate and execute
Investments in technology and innovation are vital plans to be executed within the next
financial year. This will provide companies production lines with more efficient and
productive machines. This is aimed to increase quality and productivity and to close the gap
between Cadbury and its competitors.
Best in class capabilities
Cadbury’s strategic capabilities enable the company to perform at the level required to
survive and prosper in their current market. Cadburys main reasons for achieving global
success lie within its core competitive advantages in; Research and Development, Experience
and Supply Chain Sustainability.
Cash and increasing its global confectionary share
Mangers should focus on free cash flows and avail of the opportunities of investing in
emerging markets. Cash can be seen as the fuel of Cadburys growth and as a wise investment
of determining the future profits and prospects of the company.
Reinforce brand reputation
Through Fairtrade programmes Cadbury seeks to rebrand itself as a company committed in
reinvesting in developing countries in helping them with social, economic and environmental
sustainability projects. Cadbury are aware that a core ingredient in a wide range of their
products contains palm oil, an ingredient which has threatened the habitat of the orang-utan
and contributed to global warming. In response to this, Cadbury have built on deriving palm
oil from countries, such as Malaysia, who have been affected less by this.

6. Cadbury
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Outlook
Cadbury aims to continue growing globally and efficiently by delivering high quality
products to its customers, innovating in sustainable programmes and competing to increase
their market share.
In order to achieve its goals, the organisation is aware that investments in R&D centres
focused on expanding globally (including into new emerging markets), technologies to
reduce costs and innovations that bring along future profits are key factors for the company.
Key Issues
Customer satisfaction
Customer satisfaction is at the core of any successful business. Satisfying customers’ needs
and desires can build up a loyal market that can give businesses a competitive advantage in
which all companies strive to achieve.
Providing customer satisfaction by producing quality products is at the forefront of Cadburys
image, although it has come up against some displeasure in the past. Correcting actions and
implementing new measures to overcome this dissatisfaction has been a key in Cadbury’s
success.
In 2010 the company was acquired by Kraft Food Groups, this was met by some objection by
customers who were afraid that changes would be implemented to their beloved treats. This
was seen when the shape and texture of one of their bars changed from the traditional
rectangle shape to a curve shape, this caused customers to become dissatisfied and unhappy.
The takeover by Kraft was met by some employee and customer opposition due to Kraft’s
initial intention of relocating their main headquarters out of the UK. This statement resulted
in significant customer resentment, which urged Kraft to do a U-turn and relocate the
Cadbury headquarters back in the UK.
Correcting issues like the above and reassuring customers about future plans and changes
have become key issues for Cadbury as it has undergone dramatic structure and ownership
changes in recent times. Cadbury’s new ownership is in its infantile stage, so keeping
customers happy and not ‘’rocking the boat’’ too much is of vital importance to the company,
now and going forward to ensure customer satisfaction.
Economic Downturn
As we can see from the below chart Cadbury has the second largest global market share in
confectionary candy bars. Confectionary candy bars are seen by most, as a luxury
discretionary snack, so in times of recession/downturn peoples consumption of these products
fall. A key issue for Cadbury moving forward is finding ways to deliver more affordable
products and keep market share so as to avoid threats from cheaper substitute products. With
costs of raw materials rising and customers not having as much spending power due to the
downturn, Cadbury have reduced the size of some of their bars. This enables Cadbury to still
deliver satisfaction to the customer while maintaining an affordable price and keeping
production costs down.

7. Cadbury
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Figure 1: Candy Bars: market share in Billions
Research and Development
As previously stated, Kraft acquired Cadbury through means of a tender process which was
met with unanimous approval by the Cadbury board of directors. Central to this agreement
was Kraft’s open ambition and intention to increase investment in R&D in the UK while still
retaining and developing staffs who were employed by Cadbury at the time of the takeover.
Kraft have remained true to their promise and as a result of the successful integration of Kraft
and Cadbury approximately one third of Kraft’s top 400 executives are originally from the
Cadbury team (KraftFoods, 2011). As well as this obvious faith in the Cadbury method of
operating, Kraft has further invested in the development of their workforce by means of their
graduate recruitment and apprenticeship training programmes. This gesture again shows a
determination to sustain the values, which made Cadbury such a popular brand.
Innovation has always been a cornerstone of the Cadbury brand and Kraft has displayed
commitment to build on this tradition through substantial capital investment. Over the last
few years, Kraft has invested £135 million in the Bourneville plant, which will now be
Kraft’s global centre of excellence for chocolate R&D (Stones, M. 2012). As Bourneville is
regarded as the historic home of Cadbury, this decision generated positive publicity for the
company and it was a clear indication of Kraft’s intention of building on the inheritance
received from Cadbury. The driving force behind such a significant investment is to
24.2
17
13.1
7.9
7.6
7.5
4.9
3.3
2.6
2.3
Mars
Cadbury
Nestle
Kraft Foods
Hersheys
Ferrero
Perfetti Van
Melle
Lindt &
Sprungli
Lotte Group
Storck
Candy
Bars:
market
share
in
Billions

8. Cadbury
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encourage new product development, investigate possible new technologies while at the same
time continuing to improve established Cadbury brands such as Dairy Milk chocolate bar.
Entry to Emerging Markets
A key issue in which attracted Kraft to Cadbury was their ability to infiltrate and prosper in
emerging markets, which account for 38% of Cadbury’s sales (Grocer, S. 2010). Cadbury has
an extensive distribution network in developing countries such as India and Mexico.
Cadbury’s sales had far exceeded those of Kraft before the takeover. It is widely recognised
that emerging markets are key in obtaining successful future growth figures and will enable
the company to become first movers in these markets.
(The following graphs convey how food growth and in particular growth of confectionary
and gum based products has been much stronger in developing markets).
Figure 2: Food growth (CA GR 2003-2008)
3.4%
7.4%
7.9%
8.0%
8.7%
9.5%
13.9%
17.2%
3.6%
7.2%
8.1%
8.1%
9.1%
9.7%
13.2%
17.7%
North
America
Asia
Paci;ic
Western
Europe
World
Middle
East
and
Africa
Australasia
Latin
America
Eastern
Europe
Food
growth
Snack
Products
Packaged
Products

9. Cadbury
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Figure 3: Chocolate confectionary and gum growth (CA GR 2003-2008)
As these graphs clearly indicate, expansion in emerging markets should be a key objective for
all multinational food companies. Developed markets have shown a continuous decline on
their growth rates, therefore increasing the competition level within these markets. As a result
of this Cadbury is depended on developing an effective strategy to take advantage of the
opportunities these markets provide. According to (McKinsey&Company, 2012), it is
essential that companies, such as Cadbury, find ways to entice local talent, customise their
innovation processes and develop partnerships in these markets to facilitate successful future
ventures.
4.3%
7.1%
7.7%
9.0%
9.7%
10.5%
19.0%
19.2%
8.0%
7.2%
10.3%
10.1%
11.1%
9.0%
14.6%
15.3%
North
America
Asia
Paci;ic
Western
Europe
World
Australasia
Middle
East
and
Africa
Latin
America
Eastern
Europe
Chocolate
confectionary
and
gum
growth
Chocolate
Gum

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PESTLE Analysis
A PESTLE analysis is a review of the political, economic, social, technological, legal and
environmental factors in the external environment in which all companies operate. All
companies should carry out a PESTLE analysis at an early stage in the life of the company
and update this analysis annually or when significant changes occur within the environment.
Political
Fair Trade Political Pressure
Cadbury Dairy Milk is Fairtrade Certified™ meaning a better deal for farmers in developing
countries and ensures they are paid a designated fair price. Fairtrade groups have influenced
cocoa producers in Africa, from the Ivory Coast and Ghana, and other countries around the
world that all together produce over 70% of cocoa’s global production, giving them the rights
to manipulate the price of the cocoa (supplier power). It also reinvests in the communities to
help them with social, economic and environmental sustainability projects. Cadbury sought
the Fair Trade accreditation in response to pressure from consumers and lobby groups such as
World Vision to act ethically, particularly in the farming practices used by its suppliers
(Kermond, C. 2010).
National Health Issues
With the increasing concern for national health, the Irish government increased the VAT on
confectionary, which includes chocolate, sweets, peanuts etc., from 21% to 23% (McCarthy,
A. 2010). This was a measure in response to the high levels of obesity reflected by Irish
society. However, this measure hits directly people who have a lower income and it has been
proven that people have not changed their diet. With Ireland and the UK being the biggest
consumers of chocolate in the world, it is simple part of their culture.
Ireland may follow suite of Denmark, where just over ten per cent of adults are clinically
obese, by imposing a ‘fat tax’ on foods, which are considered ‘unhealthy’. A move aimed at
tackling obesity and which will see shoppers pay more for chips, pizza, meat, and could
eventually include chocolate and confectionary products. Obesity rates compared to the
Scandinavian country are considerably higher in Ireland, where more than one-third of Irish
adults are overweight, with one-quarter in the obese category (IrishCancerSociety, 2013). By
taking measures, such as a controversial sugar tax and economic incentives for growers to
sell healthy goods, this could prevent people becoming overweight and developing diabetes,
heart disease and cancer.
National Health Issues
43%
25%
23%
5%
4%
A
little
overweighted
Normal
Very
overweighted
Morbidy
obese
Underweighted
The External Environment

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Vat Rates (Current and Historic)
Date Effective
From
Standard Rate (%) Reduced Rate (%) Second Reduced
Rate (%)
1st
January 2014 23 13.5 9
1st
January 2014 23 13.5 9
1st
January 2012 23 13.5 9
1st
July 2011 21 13.5 9
1st
January 2010 21 13.5
Food and Drink: Rates of VAT (Revenue, 2014)
Chocolate and Biscuits: Rates of VAT
Types of Food
or Drink
How
Supplied
With meals in
hotels,
restaurants,
canteens,
pubs etc.
By hotel
other than
with meals
By means of
vending
machines
By retail
stores(see
note)
By 'take-
away' only
business
Cakes, biscuits
(other than
chocolate
covered
biscuits)
Reduced Reduced Reduced Reduced Reduced
Chocolates,
confectionary,
chocolate
biscuits, crisps,
ice cream
Reduced Reduced Reduced Reduced Reduced
Food and Drink: Rates of VAT (Revenue, 2014)

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Economic
Recession/Unemployment
In September 2008, the Irish government officially acknowledged that Ireland had entered
recession. Ireland was the first country in the Eurozone to enter the global financial crisis.
This led to a severe rise in unemployment and the unemployment rate rose from 6.5% in July
2008 to 14.8% by July 2012 (Wikipedia, 2014). An assumption that chocolate was a
recession-proof treat that consumers would continue to buy despite a grim economic outlook
was proven wrong in 2011 by the sharpest fall on record in Europe’s quarterly cocoa grind –
an indicator of demand. Analysts said worsening economic conditions in the Eurozone had
prompted a sharp slowdown in European demand for chocolate. However, if we fast forward
to 2014 cocoa processing in Europe probably rose for a third quarter in the three months
ended Dec. 31, with global economic growth helping to support demand for the beans used to
make chocolate (Almeida, I. 2014).
Unemployment Rate Ireland
Ireland Unemployment Rate: (TradingEconomics, 2014)
GDP Ireland

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Expenditure on Gross National Product at Current Market Prices: (CSO, 2014)
Inflation Rate: 2007-2011
Inflation rate (consumer prices) (%)
Country 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Ireland 2.2 5.6 4.6 3.5 2.2 2.4 3.9 4.9 4.1 -­‐4.5 -­‐1.6 2.6
Inflation rate (consumer prices) (%): IndexMundi (2014)
Increase in cost of raw materials
“The price of cocoa butter, the vegetable fat extracted from cocoa beans which makes up
about a quarter of every chocolate bar, rose 63 percent in the past 20 months, reaching a four-
year high. Whole milk powder, another major component, rose over 20 percent”. (Tidy, A.
2013). Rising cocoa prices are likely to post a significant challenge for chocolate
manufacturers to post healthy margins as palm oil, chemical flavourings and fillers will
replace increasingly scarce cocoa beans and expensive ingredients.
“The impact of rising cocoa prices will continue to drive innovation in portion size and bite
size products, but volume sales of premium confectionery will decline as consumers look to
trade down." (Cadbury, 2008). Chocolate manufacturers will have to take into consideration
rising cocoa prices or else reduce the cost of goods as a way of maintaining their operations.
This could include reducing the size of their product or looking for substitutes for cocoa
beans. For example, the largest chocolate manufacturer in North America, Hershey
Company, has begun using cocoa butter as a substitute for cocoa in some of its products.
While some other companies questioned the customers, asking which one are they tend to
choose, "with higher prices for the same product," or "the same price to buy a different
product." The findings showed that most customers tend to the former.
2013 Flat Revenue
Cadbury sales in Europe were flat in 2013, the company did not reach their targeted profits
and the cost of production increased (MondelezInternational, 2013). These factors will lead to
a price increase on Cadbury products, including gum, for the upcoming quarter. On top of
this, there is pressure on the CFO and CEO of the company as shareholders will expect an
improvement on return on investment for the next financial year regardless of the current
economic situation.
Social
Population Size/Age
The faster pace of growth in emerging markets can be attributed to higher population growth
rates and rising levels of prosperity, which has increased the demand for affordable luxuries
and treats.
Population in Ireland has reported an increment of more than 60,000 people over the last five
years, despite the fact that more than 35,000 people emigrated in 2012, giving to Ireland the
highest level of emigration in Europe (O'Carroll, S. 2013).

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Population in Ireland
Components of Population Change: (CSO, 2014)
Lifestyle
Irish lifestyle has changed dramatically over the last few years, influenced partially by the
economic recession and the awareness of health. Prior to the recession, Irish people would
opt to go out for lunch/dinner at least three/four times a week. Money was spent excessively
on alcohol, tobacco and confectionary. This lifestyle of excess spending has seen an
enormous decrease; today people are more aware of what they eat and what they spend their
money on. Society has demanded to be informed of the amount of calories contained per
meal, the origin of the ingredients, such as is it organic/green, environmental friendly etc.
People are opting for healthier options when choosing food. In recent years woman in the
Irish market have become more health conscious and have an increased desire to purchase
low-calorie healthy products (EuromonitorInternational, 2013). This proves that society is
rebranding its lifestyle.
Technological
Machines
Investments for over £75 million in technology would lead Cadbury to update their current
production technology and to close the existent gap with their European competitors, Western
Europe and Germany (ShelfLife, 2014). Innovative production lines and improvements in
their production process are expected as a result of this investment. This will lead to produce
better quality products and decrease production costs, which has been seen as a major issue
for Cadbury Ireland. It is vital that Cadbury keep up to date with any technological advances
if they want to remain as one of the market leaders.
Heat-resistant chocolate
Cadburys came up with a technological breakthrough that saw the development of heat-
resistant chocolate. This innovation was firstly and successfully introduced in India in 2012,
as a response to the demand of a chocolate bar that could resist temperatures of 40 degrees.
The chocolate allows for easier storage and transport, and enhances sales in the summer
months when the temperature exceeds 33.8 degrees Celsius, the melting point of chocolate, in
some of the hotter locations around the world. Emerging markets such as India, China and
Russia have increased their GDP and their population can now afford some “luxury”
products. Cadbury India is the pivot of sales and exportations of the company in Asia, here

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the R&D and marketing teams work together to ensure satisfactory distribution and
promotion of the products.
Change in shape of bar
In 2012 Cadbury cut the size of its Dairy Milk chocolate bar from 49g to 45g as part of the
re-launch as a new ‘curved’ shape (Poulter, S. 2012). The Cadbury marketing team ‘sold’ the
idea that the roundness shape was related to sweetness while angular to bitterness, the reality
was that Cadbury were generating cost savings, such as transport and commodity costs, due
to a technological innovation. However Cadbury stayed loyal to their customers and kept the
price the same.
Environmental
Palm oil
Palm oil, derived from the fruit of oil palms, is used in two out of three of Cadbury’s
products. Environmental concerns centre on the falling of rainforests to make way for oil
palm plantations, including in Indonesia where the habitat of the orang-utan has been
threatened. These plantations have also been blamed for a huge contribution in global
warming.
Cadbury could replace palm oil with other vegetable oil, such as sunflower oil. However, to
produce this oil is needed a larger extension of land, which can lead to an even worst
repercussion to the environment. Cadbury spokeswoman Adelle Foster says “Where possible,
the limited amount of palm oil we use comes from certified sustainable palm oil sources.”
(Laugesen, R. 2013). Cadbury buy fats and oils derived from oil palms mainly in Malaysia,
and to a lesser degree in Indonesia, Colombia, Brazil, Mexico and West Africa.
Legal
Trademark colour purple
In 2013 Cadbury lost a five-year court battle, against Nestlé, one of its main competitors, to
register a distinctive shade of purple as a trademark for its chocolate bars. Appeal court ruled
the usage of the colour was not specific enough and would give Cadbury unfair competitive
advantage. Fiona McBride, a partner and trademark lawyer at Withers & Rogers, said: "This
is a massive blow to Cadbury and has made it even more difficult for brand owners to obtain
trade mark protection for use of a colour.” (Bowcott, O. 2013).
Palm Oil and Packaging
Cadbury are a very small user of palm oil, typically less than 0.1% of global supply. However
Cadbury do use it in a range of their products and there is no law on the mandatory labelling

16. Cadbury
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of palm oil. Ben Dowdle, spokesman for local pressure group Unmask Palm Oil, says it is
difficult for consumers to make an informed choice. “At the moment palm oil can be labelled
as one of 200 different scientific names. In chocolate it can be labelled as vegetable oil or
vegetable fat, and companies often use that to hide that they’re using palm oil.” (Laugesen, R.
2013). His group is attempting to get changes to food labelling legislation so companies
would have to clearly state whether palm oil is used.
EU regulations
• The Cocoa and Chocolate Products Regulations 1976
• The Cocoa Chocolate and Chocolate Products (Amendment) Regulations 1982
• The Food Safety Act 1990
• The Food Labelling Regulations 1996
(Marked by teachers, 2011)
Conclusion of PESTEL Analysis
In conclusion, trends in the chocolate and confectionary industry have been identified as
opportunities to drive the company to success by investing in new technologies and new
production lines, as well as the expansion into emerging markets. However, these changes
might cause significant threats to Cadbury particularly in their political, social, legal and
environmental factors. By carrying out a PESTEL analysis, Cadbury increases their
awareness of these threats and possible solutions to overcome them.
The following section will highlight and analyse each of Porter’s Five Forces in relation to
Cadbury. These are five basic competitive forces whose collective strength determines the
long run profit potential of a company. Each force will be addressed separately and labelled
either as a high, medium or low risk depending on its impact with regards to Cadbury’s
profitability.
Threat of New Competitors
Low Threat
Cadbury has a relatively low level threat of new competitors. The confectionary industry is
highly fragmented and although there are low-level barriers of entry, Cadbury has the
advantage of economies of scale and vast experience and capabilities. Cadbury produces on
such a substantial scale that many of its smaller competitors, who may operate in niche
markets, simply cannot compete with the cost effectiveness associated with Cadbury. This
effectiveness in production has risen through previous experience. Cadbury would also be
synonymous with being at the forefront in the progression of the techniques used in the
confectionary industry.
To produce chocolate and confectionary on a large scale, high capital investment is required.
This again would indicate a low threat of new competitors, as it would not appear advisable
on investing heavily in this industry with an eye on challenging Cadbury’s market share.
Furthermore, Cadbury possesses an extensive and thorough distribution network, which
serves to deliver their products reliably, efficiently and cost effectively. The expense of trying
Porter’s Five Forces

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to replicate such a network provides Cadbury with a competitive advantage as their own
network has been built up over many years and in conjunction with various different
partnerships. These high sunk costs which Cadbury have accepted in the past serve to
increase the difficulties new competitors will encounter. It is not likely that even the most risk
adverse investors would be keen on investing large sums of money with very little guarantee
of positive returns on investment.
Cadbury is also in a very strong position compared to that of new potential entrants due to its
distinguished and extremely popular brand. Any new firm with an intention to directly
compete with Cadbury has to formulate and promote their own specific image. This process
is considerably costly, time consuming and occurs through a lot of trial and error. An
example of this “brand creation” or evolution can be witnessed in the development and
constant assessment of the Cadbury brand. Something as minor as dropping the “s” from
Cadbury was given serious consideration and then implemented due to expected future
benefits. A new competitor would have to dedicate significant resources developing a brand,
therefore reducing the resources available for competing directly in the marketplace.
The examples discussed previously all relate to large firms who would try to enter the market
to compete with Cadbury on a global scale. The resources required to achieve this are
enormous, extremely capital intensive and hard to replicate. On a smaller scale, localised
chocolate and confectionary companies may be tempted to pursue business in this market if
they feel a niche is available for a slightly differentiated product. A successful example of
this would be Butler’s homemade Irish chocolates. Butler’s branched out somewhat from the
norm with their products and have gained a reputation as a “special event” provider of
chocolate and confectionary.
To conclude on the threat of new entrants, it would appear Cadbury holds an attractive and
powerful position in the marketplace. However, business can be hard to predict and the
possibility remains that Cadbury could encounter a more competitive marketplace in the
future. This could occur due to a new business with significant initial investment or possibly
as a result of a merger or acquisition between two of Cadbury’s smaller competitors.
0
1
2
3
4
5
Economies
of
scale
Government
regulations
High
capital
investment
Distribution
network
Brand
reputation
Fixed
costs
Organisation
capabilities
Resources
Low
cost
switching
Suppliers
accessible
Differentiated
product
Market
experience
Threat
of
New
Competitors
Low
Threat

18. Cadbury
Page 18
Threat of Rivalry
High Threat
In the confectionary industry, Cadbury are involved in a market with a high threat of rivalry.
This occurs at both a local and international level. There are low barriers to exit, which means
that weaker firms will generally not sustain a competitive advantage and therefore leave the
market. This serves to increase the profits enjoyed by the larger firms such as Cadbury and
Mars. These multinational firms compete on innovation, differentiation and marketing.
0
1
2
3
4
5
Competitor
size
Easy
to
expand
Similarity
of
players
Hard
to
exit
Low
differntiated
product
Switching
cost
High
;ixed
costs
Industry
growth
rate
Current
players
Threat
of
Rivalry
High
Threat

19. Cadbury
Page 19
As we can see from this graph, there exist a range of companies who possess a significant
share of the chocolate and confectionary market. Cadbury and Nestle are out in front and
enjoy 29.4% of the total market. The global confectionary industry is expected to reach $176
billion by 2018 and is expected to grow at an annual rate of 3% over the next five years (WN,
2013). This leaves Cadbury in a very dominant position competing mainly with Mars and
Nestle with a very high level of rivalry.
Both Cadbury and Mars want to be the dominant player in the market and invest heavily in
innovation and development in an attempt to achieve this. Nestle has also invested heavily in
recent times and successfully broke into the low calorie confectionary sector which resulted
in an increase in overall market share. Mars has taken on board Nestlé’s approach of
producing a healthier form of chocolate but so far has not been received well by the
consumers.
The industry life cycle would place the market at the maturity stage due to the fact that there
have not been many advancements or changes in technology, etc. However, it does not have
the same levels of threats, or economies of scale producing the stage’s characteristics
(Johnson et al., 2012).
Due to Cadburys years of experience and expertise in the chocolate and confectionary
industry, it has gone through phases of different levels of rivalry. Currently, Cadbury is
operating in a competitive marketplace where a sustained competitive advantage is essential.
The vast experience and capabilities inherent at Cadbury would indicate that they are in a
desirable position to compete efficiently with these rivals and to continue to try and grow
overall market share.
Threat of Substitutes
High Threat
There is a very high threat of substitution within the chocolate and confectionary industry.
The substitutes would include the following:
• Snacks such as crisps, popcorn, granola bars, fruit and cereal bars
• Types of sweets, candies, jellies etc.
• Healthy alternatives such as fruit and vegetables
• More expensive goods whose consumption may increase as disposable income
increases e.g. nuts, olives, pastries
• Alternative chocolates produced by other companies. For example, Lidl’s
chocolate brand
Consumer preferences and trends play a vital role in determining what products are currently
in high demand. In recent times, there has been a major emphasis placed on healthy eating
and lifestyle. Chocolate and confectionary are viewed as “treats” and are not linked to a
healthy way of eating. This focus on maintaining and sustaining health has resulted in a
continued growth in the market for healthier options. This may include nuts, which contain
unsaturated fats, are a source of protein, and are known for their benefits as they have omega-
3 fatty acids and antioxidants content, in return making them appealing to the health
conscious consumer. Recent health initiative campaigns have also played their part in this
shift in consumer demand for healthier options such as the “5 a day” project which
encourages people to commit to a healthier lifestyle.

20. Cadbury
Page 20
As the global economy continues to recover, people will have more disposable income. This
could result in chocolate becoming classed as a slightly inferior good and people may turn to
more expensive alternatives to satisfy their sweet tooth. Products such as yoghurts and cereals
have squeezed the demand for chocolate and although the chocolate and confectionary
industry is growing consistently, this may be a faltering occurrence.
0
1
2
3
4
5
High
number
of
substitutes
Cheap
alternative
Bene;ical
alternative
Low
cost
switching
Threat
of
Substitutes
High
Threat

21. Cadbury
Page 21
Threat of Suppliers:
Medium Threat
There is a noteworthy threat in relation to suppliers, the reasons for this threat mainly
includes the types of suppliers that the chocolate industry would be dealing with; raw
material suppliers such as cocoa, milk products, sugars, colourings and packaging suppliers.
The main raw material used to make chocolate are cocoa beans. There are relatively few
substitutes available for manufactures to replace this vital ingredient. Global production of
cocoa is carried out mainly in Mid African countries such as the Ivory Coast and Ghana. It is
important to take note that cocoa can only be grown between 10 degrees north and 10 degrees
south of the equator (HealthBenefitsOfDarkChoclate, 2010). The cocoa crops are harvested
twice annually, and there are many factors defining the success of the harvest. All these
factors give the suppliers more power over the buyers, for instance if there is a weak harvest
and the supply levels decrease, the demand of raw materials will increase and the suppliers
will be in a strong position to control and set prices (Markets&Markets, 2011).
Another point to note is the concentration of suppliers. Many cocoa producers are
accountable for large controlling farms; this shift of small producers into larger bodies’
increases supplier power over the buyers further. There are nine companies dominating the
cocoa supply chain. As there are only a few of these supplier bodies dominating the market, it
makes the misuse of purchasing and selling power possible.
There also is a substantial supplier threat in relation to packaging suppliers; producing paper
wrappers, foils, cardboard and all general packaging utilities used in the chocolate and
confectionary industry. These suppliers of packaging are not necessarily dependent on this
industry alone, and may have a portfolio of other industry interests, this spread of interests
and not relying on one industry alone; increase their power in the relationship.
The same can be said for other raw material producers, for example a prime raw material for
Cadbury in the making of their products would be milk. Many milk suppliers too would not
be solely dependent on the chocolate and confectionary industry, as milk is a common raw
material for many other industries. However, in relation to the chocolate and confectionary
industry there are many milk suppliers available to do business with. Due to generally low
supplier switching costs, milk as a raw material is seen as a low to medium threat.
In relation to ingredients and products used in the chocolate making process, there are very
few ingredient substitutes available to meet Cadburys requirements. With stringent quality
controls and food laws, the ingredients must pass a strict screening process and numerous
quality tests before being declared fit for use. This favours supplier power, as suppliers build
up a reputation for supplying a satisfactory product and companies will be more reluctant to
switch supplier as quality may be compromised (Europa, 2011).

22. Cadbury
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0
1
2
3
4
5
Differentiated
input
Quality/cost
Player
independence
Supplier
competition
High
switching
costs
Supplier
size
Threat
of
Suppliers
Medium
Threat

23. Cadbury
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Threat of Buyers:
Low Threat
The threat of buyer power in relation to Cadbury is fairly low. There are numerous retail
chains and stores that sell Cadbury products to consumers where their bargaining power is
low. The main reasons for this being that Cadbury is a very well established producer of
chocolate, their brand is iconic and they deliver high quality products continuously to a loyal
consumer base. Retailers may have the option of sourcing other chocolate brands or substitute
products, but these cannot replace what the Cadbury brand has achieved in terms of what the
loyal consumer expects. These customers are loyal to the taste and quality of the Cadbury
brand, and will not switch to other brands easily. Therefore, the retailer must continue to
provide Cadbury products or the customer will look elsewhere. Ultimately, the buyers cannot
get Cadburys uniqueness and qualities from other brands, therefore reducing their buying
bargaining power. By having a trustworthy brand image, a company can achieve a desired
competitive advantage over its rivals and the ability to elude and diminish any threat from
buyers.
0
1
2
3
4
5
Backward
integration
Differentiated
product
Product
dispensability
Financial
status
Low
cost
switching
Buyer
size
Buyer
independance
Price
sensitive
Tendency
to
switch
Threat
of
Buyers
Low
Threat

24. Cadbury
Page 24
Cadbury’s internal analysis will provide us with an overview of the resources and capabilities
that impact the company’s performance. We will look at both Cadbury’s tangible and
intangible resources and how their capabilities are used in order to gain competitive
advantage. Finally, we aim to identify both the strengths and weaknesses of the company
relative to competitors, and a VIRO and SWOT analysis will be carried out.
Resources
Tangible Resources
Product and Brand Portfolio
The Cadbury brand name has been in existence since 1824 when John Cadbury opened his
first shop in Birmingham, England. Cadbury products are widely distributed and are sold in
many countries, the main markets being the United Kingdom, Ireland, Australia, New
Zealand and South Africa. The success of the Cadbury brand can be seen in how its image is
continually maintained over time. The Cadbury brand is associated with the best tasting
chocolate which helps to differentiate it from other brands and ensure its competitive
advantage. The Cadbury brand has proven itself to be a leader in a highly volatile and
competitive market because it has successfully established, nurtured and developed its
umbrella brand and growing portfolio of products.
In 2012 Mondelez portfolio brands including, Cadbury Dairy Milk and Cadbury chocolates,
had annual revenues exceeding $1 billion each. These power Brands grew 6.5 percent over
the last financial year, even faster than Mondelez company average, which grew by 4.1
percent only (MondelezInternational, 2013).
Global Geographic Presence
One of Cadburys main advantages over its competition is its extensive geographic presence.
Cadbury's strong presence in Europe and emerging markets offers instant global growth.
According to the International Cocoa Organization, Europe account for nearly half of all the
chocolate the world eats (CNN, 2012). Taking this into consideration it is essential to
maintain Cadbury’s market position. With Western Europe being Cadbury’s core market and
the demand for chocolate increasing in emerging markets, Cadbury have a product strategy
distribution that satisfies the global market place. Cadbury can leverage Mondelez market
dominance and existing infrastructure in the US to drive sales for its own brand and products,
thereby lifting market share. (Include map of where Cadbury operates.)
Internal Analysis

25. Cadbury
Page 25
Financial Resources
Since the takeover of Cadburys by Kraft Foods, now Mondelez, financial growth has been
substantially slow. Last year’s revenues were not satisfactory and as a result of this Irene
Rosenfield, Cadburys CEO, has announced a plan to invest $600 million over three years in
emerging markets, including China and India. Even though Cadbury sales grew by 5.1% in
the last financial year and that Mondelez returned $3.6 billion of cash to their shareholders,
the director’s board were disappointed as the results were below what shareholders had
expected (MondelezInternational, 2013).
Human Resources
One of Cadburys competitive advantages is the ability to hire and retain a highly skilled and
diverse global workforce. In a saturated industry such as chocolate and confectionary
Cadbury has realised the importance of maintaining its global workforce as a unique resource
to ensure a sustained advantage over its competitors. There is a saying that applies to
Cadbury management team: “If you don't have a competitive advantage, don't compete”.
Intangible Resources
Reputation
Cadbury was established in 1824 and its long history and reputation has made it a household
name. The company's reputation has been built up over its lifetime and is an asset of
incomparable value. That reputation has earned it the trust of those who buy its products.
However, Cadbury’s reputation has been damaged by scandals throughout the years. The
controversial acquisition of Cadbury by Kraft Foods, now Mondelez, in 2010 left many
apprehensive of what the future held for the company. Kraft stated that there would be no
compulsory redundancies in manufacturing for two years and it believed it "should be in a
position to continue to operate the Somerdale facility". However in November of that year
Cadbury reiterated that statement in its offer document to Cadbury shareholders in
November. This action undoubtedly damaged its UK reputation and soured it relationship
with their employees.
In June 2013 Cadbury were accused of engaging in highly aggressive tax avoidance schemes
before the takeover. They were designed to slash its UK tax bill by more than a third.
Cadbury was reportedly concocting complex schemes that shuffled money around
subsidiaries. These included an arrangement, codenamed Chaffinch, which lent £728m to one
of Cadbury’s main UK financing companies at the end of 2006 (Power, R. 2013).
In late 2013 Nestle won a five-year court battle, against Cadbury, which attempted to
trademark its distinctive shade of purple for its Dairy Milk bars. "Our colour purple has been
linked with Cadbury for a century and the British public has grown up understanding its link
with our chocolate” said a Cadburys spokesperson (BBCNews, 2013). Their reputation has
been linked to the colour purple since the company was first established since the early 20th
century. Cadbury remain persistent in winning this battle against Nestle to register this
distinctive shade of purple, "We are studying this particular ruling and will consider our next
steps which includes the possibility of an appeal."
As a response to the Government and social pressure Cadbury have become Fairtrade
Certified™. This aims to help producers in developing countries to make better trading

26. Cadbury
Page 26
conditions and promote sustainability. However, Cadbury is one of the major chocolate
companies that has not yet publicly committed to ethically sourcing cocoa for all their
products. This could majorly damage their reputation in the future if they are not to act on
this. This could represent a competitive disadvantage over competitors and could see a power
leverage from suppliers.
Unique Resources
One of Cadburys unique resources consist of their marketing campaigns. Their coverage from
traditional media to social media advertising is a key driver in Cadbury’s marketing
campaigns successes. Advertising campaigns such as “Gorilla”, “Storytelling at Scale” and
“Yes Sir, I WILL boogie in the Office” portray the happy, joyful image Cadbury is. This
attracts customers in engaging in the brand and wanting to be part of the experience, “Enjoy
the Cadbury World Experience”.
Capabilities
Strategic capabilities
Cadbury’s three main strategic capabilities are its Research and Development capabilities,
Experience and Supply Chain Sustainability.
Cadbury have been able to take advantage of Kraft’s expertise in Research and Development
as well as being able to tap into their distribution networks. An investment of £17 million has
recently been made to the R&D department in the UK allowing it “to improve its liquidity,
efficiency weaknesses and exert more leverage in its raw materials supply markets”. (Wallop,
H. 2012).
Cadbury prides itself on its experience and expertise it has gained over the years in the global
chocolate and confectionary market. It is the second largest confectionery brand in the world
and it is the number one chocolate in Ireland and the UK. Competitors have tried to copy
Cadbury’s recipes and production processes, however Cadbury’s experience and expertise
gained over nearly 200 years is unmatched compared to fellow competitors.
Cadburys director’s board are aware of the importance of a strong relationship and
engagement with suppliers. They have decided to invest large amounts of money over the
next ten years to secure their supply chain sustainability. As well as this, Cadbury plan to
continue with their programme “Cocoa Life” which is aimed to boost the economy and
production of the cocoa farms that supply the raw materials for chocolate production. By
doing this Cadbury have a competitive advantage as they will maintain a trustworthy
relationship with their suppliers.

27. Cadbury
Page 27
Utilising Resources and Capabilities to Outperform the Competition
Value Chain
Cadburys value chain is a process that begins at the Fairtrade farms where the cocoa beans
are sourced. Cocoa beans and fresh full cream are two vital raw materials used in the process
of creating Cadbury products. Raw materials follow different processes such as refining,
conching and tempering which produce the well renowned smoothness, gloss and snap of
Cadbury chocolate. Tempering is the final crucial stage in which Cadbury products are
produced. These products are then available for retailers such as supermarkets, and for
consumers to purchase.
It is a key for Cadbury to maintain low costs within its supply chain. Future developments
must be focused to reduce costs within the supply chain by operating with a culture of
continuous improvement, manufacture products efficiently and effectively as well as recycle
waste and renewable materials.
VIRO Analysis
Resource Value Imitable Rare Organisation Competitive
Geographic
Presence
Yes Yes No Yes Parity
Product and
Brand
Portfolio
Yes No Yes Yes Sustained
Advantage
Reputation Yes No Yes Yes Sustained
Advantage
Supply Chain
Sustainability
Yes Yes No Yes Parity
R&D Yes No Yes Yes Sustained
Advantage
Efficient
Distribution
Yes Yes Yes Yes Sustained
Advantage
SWOT Analysis
This section will analysis Cadbury’s strengths, weaknesses, opportunities, and threats (S. W.
O. T.)
Strengths
1. Brand reputation
Cadbury, set up in Birmingham in 1824, is the second largest global confectionary brand in
the world. This is certain for Cadbury to gain competitive advantage due its global reputation.
Cadburys long history in the chocolate and confectionary industry has brought about a wide
range of products, including its renowned Cadbury Dairy Milk chocolate bar. Cadburys high
quality products have awarded the firm with the first biggest market share within the
Irish/UK market, accounting for 37% of the market.

28. Cadbury
Page 28
With their brand name, Cadbury has the ability to counterattack their competitors. The
success of Cadbury brand and the positive image it portrays to its customers has contributed
to the entry into emerging markets.
2. Innovation and R&D
Kraft has invested £17m in innovation and R&D department. As a result of this investment
Cadbury will be able to expand their production lines in Ireland aiming to increase production
in the country and exportations.
3. Existing customer base
Cadbury has been recognised as a family brand in Ireland/UK and because of its history and
quality of its products it has been able to build up a loyal customer base. Another factor that
has helped to keep a satisfied customer base is the healthy relationship between Cadbury and
its customers.
4. Marketing campaigns
Cadbury’s marketing campaigns have been able to identify different consumer segments in
each market by creating catchy advertisements that engage customers by portraying a
desirable lifestyle of joy and happiness. The use of social media to advertise their products
has had double benefits for Cadbury; by using social media Cadbury have lowered their
marketing costs and secondly by using social media it has increased the popularity of the
brand faster than traditional media would have.
5. Distribution channels
Due to the acquisition of Cadbury by Kraft, the financial dependence of the UK/Ireland
market decreased giving Cadbury the opportunity to gradually start using Kraft’s global
distribution networks and resources.
Weaknesses
1. Company reputation
Cadburys reputation has been affected due to India accusing them of dodging $46m in taxes
by pretending to produce at the factory that didn’t exist. This might affect Cadburys global
reputation, which is considered to be based on values of honesty and integrity.
http://www.bloomberg.com/news/2013-03-06/mondelez-gets-indian-query-on-cadbury-plant-
tax-payment.html
2. Cadburys UK/Ireland headquarters
Cadbury Ireland is managed by the headquarters located in Bournville UK. This represents a
lack of power for the Irish office in making decisions such as how the division should work,
how investments should be split and approval for new product and processes.
3. Emerging markets
Cadbury has passed the opportunity of increasing their market share in countries such as
China and Brazil where its competitors are considered first movers and have gained
competitive advantage. Cadburys brand is not widely recognised in prominent markets such

29. Cadbury
Page 29
as America and Asia as they are not the highest in the confectionary stock exchange.
Cadburys lack of controlling these markets has placed Mars number one in the global
confectionary market share, with Cadburys coming second.
Opportunities
1. New markets
With Cadburys experience and expertise they have the opportunity to enter new markets
which they have not yet exploited such as the baking market. The baking market has a rate of
medium size competitors; however, Cadburys expertise and resources would allow them to
break into this market.
2. Expansion
By Kraft acquiring Cadbury, the chocolate manufacturer is able to use Kraft’s global
capabilities and resources to expand their product and brand. This creates a presence in new
markets and by merging Cadburys high quality products with Kraft’s strong networks system;
it empowers Cadburys global presence creating opportunity to gain competitive advantage.
As a result of this merge Cadbury benefits more as it’s hard to imitated products and its
ability as fast learners allow them to use Kraft’s global capabilities and resources.
3. Future investments in R&D
Cadbury Ireland is responsible for more than €250 million in chocolate produced within the
three chocolate factories located in the country every year which meets the home market
demand and is responsible for a large amount of Cadburys product’s exported around the
world. We have identified that an investment in Cadbury Ireland factories and R&D
department is a key opportunity in increasing the revenues that Cadbury Ireland can generate
in future years.
Threats
1. Popularity of competitors
Cadburys strongest global competitors are Mars, Nestle and Hershey’s, within these four
chocolate manufacturers they control over 67% of the global confectionary market share
(TheEconomicTimes, 2013). Cadbury comes second after Mars due to its popularity in the
US and Europe. Cadbury Dairy Milk bar is the most popular chocolate bar in the Irish
market; however KitKat and Aero chocolate bars have increased their popularity among Irish
consumers causing a potential threat to Cadburys future sales.
2. Suppliers power
The increased demand for other chocolate brands in Ireland/UK markets can represent a
threat to Cadbury if its suppliers decide to take on a better price offer from Cadbury’s
competitors. This could launch a price war which could harm Cadburys relationship with its
suppliers and distributors. It is vital that Cadbury maintain a stable and trustworthy
relationship with their suppliers throughout the years ensuring respect and loyalty.

30. Cadbury
Page 30
3. Customers lifestyle
People’s lifestyle has changed dramatically over the last few years, with people being more
health conscious than ever before. Today people are more aware of what they eat and opt for
healthier options such as cereal bars rather than a chocolate bar. Cadbury can overcome this
threat by introducing a range of dark chocolate products, a healthier option than milk
chocolate and also seen as a luxury product to some.
4. Economic downturn
The global economic crisis may have an effect on the raw material prices by increasing them
unexpectedly. This will cause an increase in the price of Cadbury products, which may lead
to a decrease in its consumer base as consumers may opt for a cheaper alternative.

31. Cadbury
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The results of the internal and external analysis have outlined the strengths, weaknesses,
opportunities and threats. A summary of these can be found below:
Cadbury’s strengths must match with their opportunities. By doing so, a strength can help to
capitalize or invest in an opportunity or on the other hand to offset a weakness.
Cadbury must be aware of the possible threats within the industry and analyse the
opportunities that can successfully offset these threats.
The leading strategies to be pursued by Cadbury have been developed as a result of the above
S.W.O.T. chart analysis. Below you can find the respective matrix that displays two feasible
strategies. However, only one of these has been chosen as realistic action plan, as this
matched the largest amount of strengths and opportunities, allowing higher probabilities of
success.
Position Strategy
STRATEGY 1: Introduce a new range of products into an existent market
(S2+O3/S1+O1/S3+O2)
This strategy is aimed to introduce a new range of products into an existent market and is the
result of the following match of strengths and opportunities:
Business Implications

32. Cadbury
Page 32
Innovation and Research & Design + Investment in R&D
We have seen that R&D department is key within Cadbury managerial structure and by
investing in this department, the creation of new products and expansion into new markets
becomes a very profitable idea.
Brand reputation + New markets
Cadbury’s brand has an amazing reputation within the Irish/UK market, where they own the
first place in market share for chocolate and confectionary manufacture and its products are
recognised by consumers as the best ones in the market.
Existent customer base + Brand expansion
This will help Cadbury to create a new range of products and introduce them into the baking
market, where they have no experience yet, their brand reputation and their loyal customer
base will work together in supporting the organisation.
Conclusion
Based on the S.W.O.T. analysis of Cadbury, it shows the advantages and disadvantages of the
company. As for now, the main mission for Cadbury is to keep its leading position in their
core market, maintain stable growth on sales and profits and introduce a new range of
products into the baking market.
Due to the high competition in the chocolate industry, Cadbury needs to maintain the
advantages provided by their resources and capabilities. To keep the leading position in the
developed markets, the company needs to focus on products quality control and environment
changing. To introduce a new range of products into an existent market, the company needs
to consider the local customer preferences and the current competitors in the market.
Cadbury’s R&D department will be on charge of proposing innovative products that meet
customers’ demands.
Also the supply chain costs and advertising costs should be on the top concerning list.
With a growing emphasis on health, it is important that Cadbury develop some of their
products align with the necessary health concerns. The lack of “low calories” and “sugar
free” products of Cadbury could represent a future threat. To prevent the occurrence of such
defects, the company needs to invest more resources on rebranding some of their products
into a healthy products line.
For the future, exploring more aspects about the emerging markets will help the company in
planning a strategy that allows them to break into these markets successfully.

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Cadbury Creations
Based on the strengths and weaknesses of Cadbury and from an overall evaluation and
analysis of the opportunities within the chocolate and confectionary industry, we have
derived an action plan for Cadbury. This action plan involves Cadbury expanding into a
current existing market with a new range of products branded under the name ‘’Cadbury
Creations’’. Our main strategy is to introduce the Cadbury Creations range to appeal to kids
and mothers aged between 30 and 45. These will be creative home baking families who want
to introduce joy and happiness into the baking experience.
We have seen over the last few years the trends and culture changes towards more home
prepared food, now it’s becoming trendier to make foods at home, incorporating your own
unique twist in what you are making. We have seen in recent times the continued rise of
cooking and baking shows on our television screens, people are now very interested in food
culture, and are more than ever ready to start experimenting and trying out new things. With
this in mind we feel that a strategy to get in on this trend and new culture is the right move
forward for Cadbury at this time.
Our range of products will be accompanied by recipes and ‘Creations’ ideas. This will
encourage customers to try out these recipes and give us feedback through our social media
sites about their experience.
We discovered this niche in the market through findings that showed us that although there
are some products which are substitutes, there is no one branded range that can cater for all of
our ideas. Through our established brand and people’s perception of Cadbury, we believe that
our new range of products can grant us with a sustainable competitive advantage.
Description of range of products
We have developed a range of products including Cadburys chocolate; syrup, flour,
buttercream icing, cooking chocolate and cake decorations. These products complement each
other as they are all related to the baking market.
Cadburys chocolate syrup is a multi-purpose product that can be used with a variety of meals
such as ice-cream, pancakes, porridge, milkshakes etc. The syrup will taste like Cadburys
Dairy Milk chocolate bar in liquid form. The appearance of this product will appeal to kids
and mothers in both size and design of the bottle.
Cadburys chocolate flour differentiates itself from its competitors as kids will love the
novelty of baking with one of their favourite chocolates. As well as this mothers relate
Cadbury as a trustworthy brand in delivering quality and satisfaction.
Action Plan

34. Cadbury
Page 34
Cadbury chocolate buttercream icing will be spreadable with the intention of being a
complement to the chocolate flour. It will be sold in a jar to keep it fresh and can be used on
cakes, buns, toast etc.
Cadburys cooking chocolate is made 100% of cocoa which will enhance the taste of the final
baking product compared to using standard chocolate. It will be sold in 200grams packaging.
Cadburys chocolate cake decorations will consist of mini chocolate decorations such as
chocolate; sprinkles, balls, chips, writing icing etc. These will be packaged in small
containers that can be lightly sprinkled over cakes/buns.
Action Plan and Implementation
Our action plan is a response to fill the gap found in the home baking confectionary market
where Cadbury has not a strong presence. The goal of this action plan is to introduce a new
range of products to the home baking confectionary market, using Cadburys brand name as a
strength to break into the market. This collection of products includes Cadbury chocolate;
syrup, icing, flour and cooking chocolate and has been trademarked as ‘Cadburys Creations’.
These are a range of chocolate products that will create a joyful home baking experience.
In order to introduce this range of products successfully, we have decided to create a
specialised department which will build up, organise and implement these products from
scratch. Experienced managers and coordinators within the different areas of Cadbury have
been assigned for the senior positions of the project.
Organisational structure for a new range of products
The HR department in collaboration with our management team must ensure to hire expert
individuals to cover the areas where Cadbury is not familiar with; including raw materials,
baking, cooking and related areas to the Cadbury Creations products. As the product will
originally be launched in Ireland, R&D administration on marketing tasks will be carried out
by the Irish/UK regional team.

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Set goals and timeframe for production
It is vital that our product team has a clear set of goals to be achieved within a certain
timeframe. Project manager must ensure that the activities are completed within the time
stated and report results to the competent authorities. The project manager is responsible to
coordinate the phases of this project which include; planning, product and marketing design,
prototypes and samples, feedback, advertising, mass production and launch of product.
Brainstorming and planning phase
With the idea of this project already put in place, the team will brainstorm and organise their
ideas on how to implement the respective concept to create and launch the products
successfully.
Market research and product expectations
Surveys and questionnaires will be conducted by our marketing team to analysis customer’s
wants and preferences. The data collected from this will be used by our marketing team and
product team to project a set of expectations to be included within our product. Questions on
the surveys will include information about flavours, texture, shape, price, quantity and
design.
Product prototypes and samples
Pilot samples productions will be carried out and tested by our product and quality team.
These samples have been created according to the gap identified in the market and consumer

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preferences. These are expected to provide feedback for future improvements. Samples will
be delivered to the targeted market segment through wholesalers and retailers.
Feedback
The marketing team will be in charge of collecting feedback from the consumers and
retailers. This will provide us with essential data that will help the team to create models to
justify the respective investment on this new range of products and its future marketing
campaigns. The main sources of feedback include questionnaires, surveys and social media
sites.
The management team will work together on analysing customer feedback and addressing
any issues or opportunities that have rose to the respective departments. As well as
coordinating action plans when necessary.
Market segmentation, target market selection and positioning
The market has been segmented according to consumer’s lifestyle, age, family size, social
behaviour and consumer needs. Young families have been targeted as potential as our range
of products portrays an image of joy and happiness that can be shared among families.
Women aged between 30 and 45 are our strategic customer as they have been recognised by
our marketing team as the ones responsible for purchasing the ‘weekly shop’.
Our range of products combines Cadburys quality and taste, key features our customers
consider when purchasing our products. As our products complement each other it will give
us the opportunity to retain customers when launching future products within the Cadbury
Creations range.
Advertising
We will use a number of marketing channels in order to advertise Cadbury Creations. These
will include social media sites, such as Facebook and Twitter, TV ads, internet ads, YouTube
ads, food blogs etc. These campaigns are aimed at kids and women aged between 30 and 45
who will be influenced by these joyful ads and encourage them to purchase the products.
The advertising techniques used within our campaigns will portray a joyful and happy family
lifestyle. This will show potential customers what they can experience by spending quality
time with the family baking and cooking at home.
Customer engagement is vital to our advertising campaigns and to ensure we interact with our
customers accordingly we will communicate new products and hot topics through different
platforms. This will generate product awareness, attract new customers and will be used as a
key tool in retaining customers.

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Marketing channels
Our three main platforms for advertisement include:
Facebook
Facebook will play a very important role in allowing us to interact with our customers. A
Facebook business page dedicated solely to Cadbury Creations will be set up, which will
enable users to like, share and comment on our page. This will enable our social media
administrator to collect this important data which will show customer direct and indirect
engagement and interaction with our products. As well as this we plan to make polls, such as
‘Which is your favourite flavour?’ This engagement with the customer will make them feel
involved and valued.
Facebook will allow customers to upload and share their own content, which will increase
brand awareness and the popularity of our products.
Twitter
We will set up a Twitter account to keep in touch with our customers and for them to follow
up on information about our business, offers and products. We will be able to get feedback
from customers and have the ability to respond quickly.
Our Twitter account will create our Cadbury Creations personality which is aimed to portray
a positive image of the company’s values and beliefs.
TV Ads
We have planned a number of TV ads with Fallon London agency which will bring back the
Gorilla from previous advertisements. The Gorilla advertising campaign proved to be very
successful so we hope to build on this success. We will have the Gorilla return wearing an
apron baking cakes with two baby gorilla, the idea being that they are his kids.
The TV premiere of the return of the Gorilla is scheduled to be on a Saturday night just
before the family movie on RTE One. This has been proposed in order to reach a large
number of viewers in the country.
Marketing Mix
A crucial objective when launching a new product is formulating an effective marketing mix.
This involves putting the right product in the right place, at the right time, at the right price. It
is essential that our Cadbury Creations range is positioned where our target market is. Our
products should be priced within a range that our customers can feel the effect of cost
benefits. It is rendered imperative that proper consideration is awarded to developing the
marketing mix as any error can result negatively on the performance of the product.

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We have developed a range of products including Cadburys chocolate; syrup, flour,
buttercream icing, cooking chocolate and cake decorations. These products complement each
other as they are all related to the baking market.
Product
Our new Cadbury Creations range has been developed to bring back the fun to food. Our new
selection of baking products is focused on bringing the delicious Cadbury flavour to a whole
new market. We expect our customers to use the new range of products with a variety of
foods. The Cadbury chocolate syrup has been developed with all times of the day in mind as
a delicious compliment to pancakes, porridge, ice cream etc. Other products in our new range
such as our Cadbury chocolate flour will serve to provide a certain market with a delicious
and fun alternative to traditional baking flour. We firmly believe this product range will be
successful with various demographics, particularly young families with kids.
Place
At Cadbury, our extensive distribution network has been built up over a sustained period of
time. As a result of this, our new range will initially be available from all large supermarkets
such as Dunnes Stores, Tesco and SuperValue, with whom we currently have good working
relationships with and through baking focused websites such as homebaking.ie and
kitchencookware.ie, which are specialist of baking products. We have chosen these places as
these are common places where our target market shop. Corner stores would typically be
associated with “necessity” goods such as bread and milk so therefore we have decided
against pursuing this avenue.
Price
As with the majority of products, the deciding factor is price. When considering the pricing
of our new range, there are a number of factors to take into account. Obviously, the overall
goal is to make a profit. We have to consider what the customer is willing to pay and what
price our competitors charge for similar products and substitutes. A pivotal element when
deciding price is the perceived value of the product from the customer’s perspective. This
perceived value has a huge contribution to the success of a product compared to other factors.
The decision was made to launch our new range at discounted prices which are lower than
those of competing branded goods. These initial promotion prices are temporary and it is
expected that they will serve to increase product awareness, as well as increasing sales. After
a 4 week period, we expect Cadbury Creations to become familiar with our target market and
the prices will revert back to normal. We have decided to match our competitor’s prices in an
attempt to entice customers to switch their preference at no added expense. Due to various
factors, such as economies of scale, this price level will still serve to produce healthy profits
if sales go as expected.

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Promotion
At Cadbury, our brand is associated with innovative and successful marketing campaigns. We
intend to promote awareness of our new range through an intensive campaign directed at kids
and mothers. We believe that the most effective way of reaching our audience is through a
dynamic media campaign which is supported through simultaneous billboard and social
media campaigns. For this reason, we have decided to bring back the Gorilla to represent
Cadbury Creations. We feel his previous success will link customers with our new range of
products immediately. Our Gorilla marketing campaign will take place on both TV and social
media channels.
Benefits
The benefits of implementing this action plan within the Irish market will allow Cadbury to
increase its brand awareness locally, as well as resulting in economic benefits.
Economic
Through Cadbury Creations, we are focusing on a new target market which will serve to
increase brand awareness and popularity, thus increasing overall profits. By accessing this
niche, our customer and product portfolio will differentiate further and generate more interest
in other Cadbury products which will result in increasing sales.
Market expansion
Cadbury Creations range of products will allow Cadbury to break into a market that has not
been explored yet by the company. The baking market has proven to be an attractive market
with few big competitors and opportunities for Cadbury to grow.
Increase Cadbury’s products variety
Cadbury’s number of products will increase as a result of this action plan. If Cadbury
Creations breaks into the Irish market successfully, it will be very feasible to start exporting
them into other European countries.
Employment
By manufacturing Cadbury Creations in Ireland our company will open two extra production
lines which will create direct jobs for 30/40 people and a higher number of indirect jobs. This
will benefit employment rates in Ireland.
Risks
Due to Cadbury’s superior brand reputation and the rapport which has been built up with its
customer base over the last 100 years, we could wrongly assume that when Cadbury launch a
new product the risk involved is considerably low. However, the reality is customers can
switch to different products for the simple reason of a cheaper price.

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Low differentiation from competitors
Cadbury Creations products have a low differentiation from its competitors. We are
completely relying on Cadbury as a brand as our main selling point.
Demand for baking products
There is a risk that the audience do not respond as expected and that the sales target are not
achieved. This could be due to a change in economy, consumer habits or poorly marketing
campaigns.

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